Multistate operator (MSO) Trulieve Cannabis (TCNNF -1.96%) is beefing up its presence in Pennsylvania. The company announced Monday that it has reached an agreement to purchase a dispensary license from Anna Holdings, under which it is permitted to operate three pot retail stores branded Keystone Shops in the state.
Trulieve will hand over an up-front payment of $60 million for the license, $40 million of which consists of its subordinate voting shares, with the remainder in cash. The company said it expects the acquisition to close by the end of the second quarter. It is subject to approval from the relevant regulatory authorities.
With the three new stores, Trulieve's count will increase to 86. The three Keystone Shops outlets are located in Philadelphia -- the state's most populous city -- Devon, and King of Prussia.
Already strong in its home state of Florida, Trulieve has lately been concentrating resources on enlarging its footprint elsewhere. The company's CEO Kim Rivers was quoted as saying that her company "continues to bolster our national expansion efforts with acquisitions that both complement our current portfolio and strengthen our long-term strategy."
Since Anna Holdings is a privately held company and does not publish its financials, we don't have a fix on how much revenue the three dispensaries take in. Regardless, they are located in fairly populous areas (particularly the Philadelphia store), and the fact that Pennsylvania limits its dispensary licensing makes them that much more valuable. So this feels like a sensible and opportunistic buy for Trulieve.
Investors might be concerned about the price tag of the deal, though. On Monday, Trulieve stock closed 0.3% lower, in contrast to the 1.4% gain of the S&P 500 index.